It’s a landmark decision that could help reform the perniciously entrenched culture of graft in Brazilian politics. On Tuesday, Brazil’s Supreme Court ruled that José Dirceu—former President Luiz Inacio Lula da Silva’s first chief of staff and the man responsible for drafting many of the policies that helped turn Brazil into one of the world’s most dynamic economies today—is guilty of overseeing a wide-ranging cash-for-votes scheme that paid millions of dollars to members of Congress to support Lula’s program. The former president of Lula’s Workers Party (PT), José Genoino, was also convicted.

The Dirceu verdict is arguably the most important rendered in the so-called mensalão scandal, which has resulted in the largest corruption trial in Brazil’s history—and in one of the country’s biggest tests yet as it moves closer to joining the club of developed nations. Mensalão, which means “big monthly payment” in Portuguese, has gripped Brazil since the case’s first details were revealed in 2005, the same year that Dirceu, 66, resigned as the top aide to Lula, who is not charged himself in the scandal and insists he knew nothing of the scheme. More than 20 of the 38 people on trial, ranging from bankers to secretaries to politicians working for and with the PT, have so far been convicted for taking part in siphoning money from state-run companies to pay lawmakers.

Dirceu, who with Genoino will be sentenced later this month and faces up to 12 years in prison, claimed Wednesday that he’d been “lynched” by a Supreme Court acting under “heavy pressure from the press.” But chief prosecutor Roberto Gurgel called the mensalão plot “without doubt the most daring and scandalous case of corruption and embezzlement ever seen in Brazil.” Although the guilty verdicts against Dirceu and other senior members of the PT were widely expected, they were nonetheless shocking. Brazilians are accustomed to graft, yet the idea that several of the nation’s best known political figures could go to jail for corruption was until recently unthinkable. (Former President Fernando Collor de Mello resigned in 1992 after being impeached on corruption charges, but he was later acquitted on a technicality.)

The convictions also mark a critical, if uncomfortable, step in the anti-corruption campaign of President Dilma Rousseff, who served as Lula’s chief of staff until her own election to the presidency in 2010. At least six of her cabinet ministers have resigned under corruption clouds, and her willingness to let mensalão run its course, even if it risks tarnishing the legacy of Lula, arguably Brazil’s most popular head of state and her close friend, helps burnish her leadership. “The trial itself is extremely important from a symbolic point of view,” says Christopher Garman, a Brazil analyst at the Eurasia consultancy group. “It highlights a longer structural reform that is going on in the Brazil public sector which suggests that oversight mechanisms…are starting to become more transparent.” He adds: “The sense of impunity is starting to diminish.”

Garman and other political experts say the Supreme Court justices’ uncompromising stance could mark a turning point in how Brazilians, and their courts, see and deal with corruption. They point out that while the problem may still be rife—Brazil’s economy loses at least $20 billion to graft each year, according to two recent studies—the country’s institutions seem less willing now to condone it. Federal police, for example, are acting more vigorously against corruption, mounting more probes and raids. Judges and prosecutors face more public scrutiny following a 2005 judicial reform, and the media are now relentless in chasing down alleged malfeasance. A Clean Slate law now prevents politicians with criminal records from running for office, and a recently approved freedom of information law has made investigations easier.

A big hope is that the PT will now be chastened as well. After Lula was first elected in 2002, he and his longtime confidante Dirceu—a former leftist guerrilla once exiled by Brazil’s 1964-89 military dictatorship—introduced policies that helped to modernize Brazil and lift more than 35 million people out of poverty. But Lula, a former labor union leader, was oft accused of turning a blind eye to the venal doings of his allies. And while Rousseff has repeatedly made it clear she doesn’t suffer such foolishness gladly, the same still can’t be said of her party.

Mensalão, in fact, has convinced most Brazilians that the PT, once an island of relative trustworthiness, can be as crooked and delusional as its opponents. Lula suggested recently that the mensalão scheme didn’t even exist, and current party president Rui Falcão has attacked the Supreme Court as “dirty, reactionary conservatives out to destroy the PT.” Senior party members say political opponents who used mensalão against them in last weekend’s municipal elections were guilty of low blows.

Still, the scandal didn’t appear to hurt the PT at the ballot box: it won 618 municipalities on Sunday, 71 more than it got in 2008 at the height of Lula’s success, while PT candidates qualified for run-off elections in 24 of Brazil’s 83 biggest cities, most notably São Paulo, the jewel in the country’s electoral crown. What’s more, it remains to be seen if defendants like Dirceu and Genoino actually receive time behind bars.

But for the moment, Brazilians, as they did in 1992, are celebrating not the downfall of a politician but the triumph of a process—another step away from impunity and towards modernity. “The trial is emblematic of a rupture with the long-standing culture in Brazil that those who hold power get preferential treatment under the law,” says Oscar Vilhena, a professor of constitutional law at São Paulo’s Getulio Vargas Foundation. “The law is being taken more and more seriously.” And so, as a result, is Brazil’s bid to be a developed nation.